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The WeWork phenomenon of shorter CRE leases

VIDEO
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April 08, 2016

Jason Sevier

The traditional, 10-year commercial real estate (CRE) lease could be a thing of the past, as the industry undergoes a WeWork phenomenon, with newer, startup firms demanding shorter lease terms of just two to three years.

Experts from Taconic Investment Partners, TIAA and RSM discuss how a growing number of firms are asking for shorter lease terms and the impact it’s having on decisions to prebuild or retrofit space, how much to spend on capital expense and how much of a premium owners can charge in rents.

Talking about lessons learned during specific renovation deals, the trio also discuss whether the era of prebuilt office space is largely over, with RSM’s Jason Sevier saying landlords today must “rethink their leasing options”, as tech, media and advertising tenants take space formerly considered the preserve of law firms and financial institutions.

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